The following financial information was obtained from the year ended 2024 income statements for Luigi Automotive and Steinbeck Automotive: (Click the icon to view the financial information.) Requirements 1. Compute the times-interest-earned ratio for each company. Round to two decimals. 2. Which company was better able to cover its interest expense? Requirement 1. Compute the times-interest-earned ratio for each company. Round to two decimals. Begin by showing the formula for the times-interest-earned ratio. Times-interest-earned ratio = C--) Data table Net income Income tax expense Interest expense Print $ Luigi Steinbeck 52,395 $ 20,590 550 Done 89,990 26,260 3,100 X

Computing times-interest-earned ratio The following financial information was obtained from the year ended 2018 income statements for Cash Automotive and Pennington Automotive: Requirements Compute the times-interest-earned ratio for each company Round to two decimals. Which company was better able to cover its interest expense?

eBook Print References INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Other expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes (at 21%) Net income Dividends Assets Cash and marketable securities Receivables Inventories Other current assets Total current assets. BALANCE SHEET (Figures in $ millions) Net property, plant, and equipment Other long-term assets $ 12,600 3,760 4,127 2,338 $ 2,375 655 Total assets Liabilities and shareholders' equity Payables Short-term debt $1,720 361 $ 1,359 $816 Other current liabilities Total current liabilities Long-term debt and leases Other long-term liabilities Shareholders' equity Total liabilities and shareholders' equity End of Year Start of Year $ 152 2,370 208 902 $ 3,632 19,855 3,710 $ 27,197 $83 2,082 157 837 $ 3,159 19,913 4,156 $ 27,228 $ 2,504 1,389 781 $ 4,674 8,512 6,118 7,924 $ 27,228 $ 2,980 1,543 757 $5,280 7,907 6,089 7,921 $ 27,197 Calculate the following…